New Zealand Dollar the Weakest of the Commodity Bloc Ahead of NZ Trade Results

The Australian dollar and Canadian dollar were the strongest of the major currencies, as increased risk appetite drove demand for FX carry trades. However, the New Zealand dollar was the weakest of the commodity dollars as upcoming data is projected to show that New Zealand’s trade surplus narrowed to a 5-month low of NZ$215 million in June from NZ$858 million. Indeed, the import balance is expected to edge up to NZ$3.2 billion from NZ$3.1 billion, while the export balance could dip to NZ$3.4 billion from NZ$3.96 billion. As long as the trade balance continues to reflect a surplus, the news shouldn’t be too market-moving. However, if exports surprisingly take a heavier hit, sending New Zealand back into a trade deficit, the currency could fall. Key support for NZD/USD sits at 0.6535/50 while resistance looms at 0.6600/31.